With the downturn facing the state’s oil and gas industry, North Dakota leaders have elected to court the volatile and burgeoning world of crypto mining and blockchain services. With the recent announcements that separate multimillion dollar projects are in the works from two companies called Bitzero and FX Solutions to build massive mining and server farms in North Dakota, it would seem no one involved has been paying attention to current events.

While the money pumped into the crypto realm over the last two years has captured the attention of the world, recent instability and the resulting collapse in the value of everything from Bitcoin itself to NFTs should give our leaders and taxpayers some hesitation about throwing the state’s lot behind them.

Blockchain technology began as a techno libertarian circumvention of the global financial system, a means of anonymously paying for something digitally, free from scrutiny of a bank or credit card companies. In the years after its mysterious launch onto the internet, the digital currency has become more widely adopted, spawning thousands of imitators.

Instead of being a means of techno-liberation, crypto has been treated more like a speculative product like gold, which it decidedly is not. Crypto currencies are nothing more than zeroes and ones shaved off of a figurative block, which are only as valuable as they are practically useful to the user. It just so happened that a majority of the “users” of cryptocurrencies and holders of mined coins treat them as stocks or even actual commodities.

Critics of cryptocurrency investing have long considered it an example of the “greater fool theory,” the notion that money can be made on something if it is able to be sold for prices that exceed its actual intrinsic value, as long as a “greater fool” is willing to purchase it at the elevated price. Of course, inevitably investors realize that the intrinsic value is nowhere near the trading price, causing a correction and crash that could take the price all the way down to zero.

If a coin fails, they could potentially become as worthless as a Zimbabwean dollar, but at least that can be used as toilet paper. When the supposedly “stable” coin LUNA collapsed under the weight of its own algorithms, investors in the coin lost over $40 billion, leaving the holders of the crypto poorer than when they bought in. Terra’s Luna has only been the most recent and high profile crypto to fail. The crypto tracking website www.coinspy.com has compiled a database of all the failed coins and tokens launched since the proliferation of blockchain technology. It currently has 2,416 entries.

Our leaders pitch that cryptocurrency is the “new oil” for North Dakota is a strange one, especially when the two are compared. Petroleum and its derivative products are required to fuel and produce pretty much everything that makes up the modern world, including every piece of technology used to make datacenters and “clean energy” possible. Around 31% of North Dakota’s energy comes from windmills, and every single one of those windmills requires lubricants made from, you guessed it, petroleum.

Bitzero currently plans for only a meager 200-megawatts between all of their datacenters, which pales in comparison to what FX Solutions is building on 77-acres west of Williston. FX Solutions revealed in its announcement in January that it would initially operate on 240-megawatts before ramping up to 700-megawatts when it is fully operational. That’s nearly the equivalent of powering Fargo three times over.

Both companies and state leaders have publicly stated their desire to be at the forefront of “carbon neutral crypto,” made possible by coal power made “clean” or by fields of wind turbines. The environmental friendliness of crypto has also been a cause for concern, with large amounts of space, energy and resources required to power and cool the football field-sized data centers, not to mention the rare earth minerals necessary to manufacture the processors and servers that do all the work.

That then begs the question, why are we planning to strain the state’s power grid with behemoth megawatt guzzling server farms while rolling blackouts are on the horizon and investors are fleeing crypto currencies and collapsing the market?

As long as the federal government remains committed to the “not in my backyard” approach to energy policy, it boggles the mind that any individual, company or government would lean into an industry that requires so much of it. Whatever world the unofficial “Green New Deal” makes, it is unlikely that it will be able to manage every hangar-sized coin mining server farm competing for every very last megawatt on the grid while citizens nationwide wait hours to charge their vehicles during yet another rolling blackout.

Who will the final fool in the chain be? It may very well be the taxpayer, with no one down the line willing to bail them out.